Material Issues of Corporate Management
Action on Material Issues
The JFE Group’s actions related to management issues are based on identifying materiality and setting KPIs to minimize negative societal impact and maximize societal value by investing JFE Group’s resources from the standpoint of meeting stakeholder needs. In 2016, we determined our material CSR issues (13 issues in 5 focus areas)by comprehensively identifying 35 issues that reflect society’s expectations in the context of JFE’s business and then by prioritizing the issues through the two criteria of stakeholder expectations and relevance to business (societal impact).
In FY2021, we formulated the Seventh Medium-term Business Plan, recognizing that ensuring environmental and social sustainability (helping to solve critical issues) and establishing economic sustainability (stable earnings power) are key to the JFE Group’s sustainable development. Accordingly, we reorganized our materiality by adding economic issues to our existing CSR issues to identify all our material issues of corporate management. We will demonstrate the Group’s vision of “contributing to society with the world’s most innovative technology” by working in concert to address these issues.
Process for Identifying Material Issues of Corporate Management
The JFE Group has been promoting actions that address the material CSR issues identified in 2016 (13 issues in 5 focus areas).
Refer to the following on how we identified material CSR issues up to FY2020.
Material CSR Issues (CSR REPORT 2020)
In FY2021, the material issues of corporate management were identified through the following process.
The material CSR issues identified in 2016 were reassessed for their importance in terms of relating to current operations, stakeholder expectations and achievement of KPIs.
Based on discussions at each operating company, major strategies in the Seventh Medium-term Business Plan were grouped together with the sources of competitive advantages in the JFE Group's business model, and economic-related issues were clarified for the economic sustainability of the Group.
●Source of Competitive Advantage
Steel and Trading Businesses: Production; Sales; and Technological Development
Engineering Business: Engineering, Procurement, and Construction; Sales; and Technological Development
Economic-related issues were added to the list of reassessed CSR issues, and their appropriateness as issues for the JFE Group was deliberated by the Group Management Strategy Committee, screening out 20 material issue candidates.
20 Candidates for Material Issues
- Achieve carbon neutrality by 2050
- Provide eco-friendly businesses and products
- Protect the global atmosphere
- Pursue resource recycling
- Prevent workplace accidents
- Ensure the health of employees and their families
- Pursue diversity and inclusion
- Strengthen human resources development
- Implement workstyle reform
- Increase efficiency and enhance cost competitiveness in production and EPC
- Stable supply of products and services
- Ensure quality
- Increase the added value of products and technologies
- Bolster sales capabilities
- Meet customer needs
- Develop and expand the base of our growth businesses
- Develop cutting-edge technology
- Ensure financial soundness
- Ensure adherence to corporate ethics and compliance
- Respect the human rights of each person involved in our business
The Group Management Strategy Committee and Board of Directors deliberated on the 20 candidate issues, and narrow them down by identifying the most important 13 material issues for the current JFE Group.
- Reduce the JFE Group's CO2 emissions
- Contribute to reduction of CO2 emissions across the society
- Prevent workplace accidents
- Ensure the health of employees and their families
- Pursue diversity and inclusion
- Strengthen human resources development
- Create workplaces that motivate employees
- Increase efficiency and enhance cost competitiveness in production and engineering
- Raise quality of products and services and ensure reliable supply
- Expand business by increasing value added in products and services with advanced technologies
- Sales strategies for realizing sustainable growth
- Ensure adherence to corporate ethics and compliance
- Respect human rights throughout the supply chain
Contribution to the Sustainable Development Goals (SDGs)
In September 2015, a UN Summit adopted 17 SDGs to be addressed through worldwide efforts to achieve sustainable development. The JFE Group will respond to global community needs and contribute to SDGs through our initiatives on material issues of corporate management.
KPIs for Material Issues of Corporate Management
Performance Evaluation for FY2022 KPIs and Establishment of FY2023 KPIs
We assessed the performance of KPIs for FY2021 that were established to address material issues of corporate management identified in FY2022 and established KPIs for FY2023 based on the results of the evaluation and third-party opinions. FY2022 performance and KPIs for FY2023 were finalized following discussions by the Management Committee and other organs of each operating company and deliberation by the Group Management Strategy Committee and Board of Directors. Going forward, the Group will continue to work in concert to set KPIs that reflect the characteristics and realities of each operating company and effectively implement the PDCA cycle to promote its initiatives.
Material Issues of Corporate Management and KPIs
Enhancing ROE by Achieving the KPIs
The KPIs for each material issue are closely tied to the financial targets. Achieving the KPIs for each issue affects various drivers of improvement, leading to the achievement of the financial target (10% or higher ROE) and results in increasing corporate value over the medium to long term. The connection between these initiatives for material issues and financial targets is deeply shared at operating companies and on the front lines, increasing the effectiveness of these initiatives.
Connection between KPI-related Elements and Financial Targets
